The $6T Barrier Holding Electric Cars Back
bloomberg.com
bloomberg.com
Remember that wherever there is a gasoline pump, there is electricity, and the possibility of a charging station.
One day the internal combustion vehicle will be seen as quaint as a horse defecating in the street.
I'm looking forward to pervasive electric cars as well, but really how much of this 'absurd complexity' do you need to deal with in a conventional car? And how exactly do you have to 'deal with' it? You get a mechanic to look at for a couple of hours once a year and that's it.
You could dramatically list all the complex components in an electric vehicle - down to the microscopic integrated circuits - as well and say that they all need to be 'dealt with' because it's serviced once a year.
The problem in taking it there as much as is paying for the privilege :)
Does anyone know if electric cars have less problems that require expensive repairs?
My impression from watching a few Youtube videos of Tesla owners who are not in warranty [0] is that they aren't actually very cheap to run.
In theory, they should be inexpensive - electricity < gas and there are physically fewer parts, but it sounds like there were substantial teething pains. We'll see if/when they got to Toyota levels of reliability.
I think as humans we have a better chance of making the circuit board more reliable than the assortment of mechanical gadgets in a modern car, but independent repair is dead.
Since we have both systems today -- a dealer/warranty sphere and an independent repair sphere -- it's easy to compare the two and to realize just what kind of nightmare we're signing up for by putting control into the hands of the manufacturer.
Think of it like paying for thrust on jet engines rather than the engine itself. Then manufacturers are incentivized to optimize lifetime, efficiency, and maintainability rather than selling new engines.
From Tesla forum: The Tesla thermal management system is fairly complex, using a compressor in a standard cooling cycle to provide cooling for cabin air, battery, and motor. Each of cabin, motor and battery have their own sealed coolant loops, but are thermally connected together by heat exchangers and in some cases, by fluidic valves. Two of the coolant loops use radiators and coolant very similar to what ICE cars have.
(Edited this comment extensively for completeness.)
Also, $6Tr seems on the high side to me. That's the same as 150 million $40,000 electric cars. Is the infrastructure really that expensive?
Also, it doesn’t make sense to talk about “affordable electric cars” as a monolith. Electric cars are already cheaper than the alternatives for some people when you calculate Total Cost of Ownership, it depends on your requirements and use case. That will become mainstream step by step in different sections of the market.
"at a profitable rate"
So this assumes that the chicken-and-egg electric car/infrastructure can evolve together profitably while reaching critical mass. (To be sure, I believe they can, but it will take either government or brave investors to get there.) So the question really is "can $6T be divided up into the cost of whoever is paying for it, i.e. electricity users to maintain profitability as it is built?"
If you assume the answer is yes, there is no question!
(As for the "maintaining the grid", yes, obviously we are already maintaining it profitably. No need to build critical mass/adoption or initial infrastructure investment, so no interesting stories to write!)
Also worth saying that how many years in the history of the electricity grid has demand not been growing? That may not be the normal state recently, but it has been for the majority of the history of the industry.
A plea: There are people outside cities. Lots of them. Stop pretending we don't exist, and calling us rednecks/flyover/etc. Its become a staple of HN and getting worse. It makes me sick to read the comments sometimes. We grow your food, build your infrastructure, but get no empathy when we have no internet access. Its bigotry plain and simple, and rampant here. Usually stated in cowardly downvotes rather than reasoned debate to perserve image. I fully think you should be required to respond, or upvote a response, before downvoting. It would surface the real bias entrenched here.
Try to leave the whinging about your comment getting flagged or whatever out.
You're not missing much. Troll account.
That's whinging, plain as day.
Tesla's sales prove you wrong: people are already replacing their current ICEs with higher-priced EV, although on a /km basis, the Model 3 is already cheaper than an equivalent ICE (e.g the BMW Series 3). We just need Tesla to ramp up its production and introduce economy models, and the other manufacturers to try to compete.
I am not saying that you can buy a low-cost EV for your needs/budget, but that your first 3 assertions are plainly false.
Some people are, but only the non-cost-sensitive or people with specific use patterns - e.g. Priuses became incredibly popular as taxis.
For the big pictures on the Telsa/BMW/Mercedes segment, check this out: https://datawrapper.dwcdn.net/hYZ1J/8/ (it stops at August, but know that they sold 22.5K Model 3 in September)
Edit: for BMW, I found this
>Here's the number breakdown: BMW sold 14,450 passenger cars in the U.S. market in August. This number includes sales from compact crossovers like the X1 and X2 as well. That's a 13.5 percent decrease in car sales from August 2017. https://www.autoblog.com/2018/09/06/tesla-model-3-outsells-e...
That is for August too, so this has probably worsen since then.
1) start delivering in other countries (NB: demand for sedans is much bigger in Europe and China than North America)
2) start lowering the average selling price, with the Mediam and Short range models
3) get more people to see and drive the car
the market will explode, just like it did with the Model S.
Remember they expected the S market to be 30K units/y back in 2012, but it now exceeds 50K while selling the X (based in the S platform) and the 3 (whose performance, fully-optioned version definitely compete with the entry). While reviewing the 2012 plans, I found that they surpassed all their goals, early: http://files.shareholder.com/downloads/ABEA-4CW8X0/191162940...
Rather like the iPhone is the most profitable phone, it just means the price is a lot higher.
How is the assertion that a $15k gas car that can go 400 miles followed by a 5 minute 100% full up is superior to a $35+ electric car that might make it 300 and then need a 30+ charge incorrect?
Yes, long-term the pricing, range and maybe even fill up times should become equitable, and along the way the article's main point about chargers covering the planet will have to be dealt with.
More than 50% of the trade-ins for the Model 3 are sub-$35K vehicles (new price).
>Wealthy buyers are getting them as third cars!
Source?
>How is the assertion that a $15k gas car that can go 400 miles followed by a 5 minute 100% full up is superior to a $35+ electric car that might make it 300 and then be need a 30+ charge incorrect?
Who said that? Are you rhetorical? You don't seem to be familiar with EV ownership if you think that's how people decide to switch. They are a multitude of benefits in EV that makes it okay to spend some 20 minute charging the car after 3h of driving (like having a fully charged battery every morning for peanuts, or not having to spend much on maintenance, or not worrying much about car depreciation, etc).
>the article's main point about chargers covering the planet
That won't be a problem. Gas stations are already becoming unprofitable so we don't have much of a choice and capital isn't actually lacking (banks are just waiting for the right time to invest). More importantly, all the $$ that are spent on the oil infrastructure will gradually become available for the EV infrastructure (a great upgrade to the grid that will make the switch to renewables even more economical thanks to economy of scale). One has to wonder why the journalist didn't even try to estimate the cost of the oil/ICE infrastructure (capex & opex). Here's one figure: the oil & gaz industry spends ~715 billion USD every year just to maintain the supply! The $6T isn't that big when you factory in everything and when you understand that this will be a multi-decade transition.
Not yet, I guess. But the $35K Model 3 should be delivered mid 2019 and the first used sales should be available soon after. I doubt Tesla will decrease its prices (they're slowly securing the industry's profits, à la Apple).
I'd expect most people to spend more on EV than did on ICE. I wonder if this legitimate question (when people wonder how much to spend on an EV vs cheap ICE) will be later compared to the famous 2007 Ballmer moment: https://www.youtube.com/watch?v=qycUOENFIBs :)
Something like a Mitsubishi Outlander? You’d need to run the calculations, but $17k over the course of a decade in fuel and maintenance costs leaves a lost of leeway.
It would help a lot to have better infra to support infrequent needs like long range driving, hauling, etc. If it was easy to access these services I'd feel more confident owning a shorter range vehicle. Traditional car rental services are dinosaurs.
Other sources report the average as 16 miles or most within 25 miles, with a very few up to 200 miles.
https://nhts.ornl.gov https://www.creditdonkey.com/commute-statistics.html https://itstillruns.com/far-americans-drive-work-average-744...
PS How cool is it that I can do even half baked data analysis on my pocket computer at the spur of the moment on such a thing. Didn't have to pay anything or even make an account. Thank you U.S. Department of Transportation.
If you wanted to go electic with a commute like that, you'd probably end up spending money on an electric car with a large battery or with quick charging capability (or at least a charging capability at work). On the other hand, driving would be such a huge part of your life that the comfort and reliability might make the whole thing work out well, depending on the local cost of electricity.
[1] http://www.visualcapitalist.com/average-commute-u-s-states-c...
Spillover from the culture war, sadly. So long as you're prepared to make it a two-way street and understand urban problems and environments, things needn't be this way. It's probably related to how many far-right politicians seem to come from the more rural states.
The global fleet is about 2 billion passenger and commercial vehicles, and the global yearly production is about 100 million. So even if all new cars sold from now are electric, it will take 20 years.
But who knows what kind of autonomous vehicles and other innovations we'll have in 20 years. Buckle up :)
As the resale value of ICEs will plummet and their cost of ownership/operation will increase, a vicious circle will accelerate to quickly make them a liability.
Bloomberg provides no clear backup on the math (“according to Goldman”) but I’m guessing they are pricing a scenario where all electric cars are completely drained and charging to full all at once. Practical usage is more like a trickle charge every night. A step further, electric utilities are thrilled to get to supply this energy to you, and there will be a cat and mouse game as car charging software works to avoid peak electric surge pricing. Electric utility remains the winner, since they can heavily incentivize time-shifted charging (i.e. dont start charging until 1 am, get half price kws!), and they can run their traditional plants more efficiently or even issue firesale pricing notices for sudden oversupply from renewables.
There is no barrier, there is modest opportunity, and the implication of the barrier is “i’m not buying a car because the national grad can’t support me!” In the same breath, the article discusses how electric autos are selling like hot cakes.
It's very easy to picture this in a modern metro area which probably already has a well-planned (and mostly Tesla) charger network. But just the U.S. alone has 2.3 billion acres of land to cover with chargers at homes, businesses, parking garages, apartments and dedicated charging points. It's not trivial, and it absolutely does not yet exist.
(But I believe it's a surmountable business/engineering challenge, if not an expensive one.)
This article from BI indicates that 30,000 charging stations will cost $8bn, which is roughly 0.1% of the $6tr figure. That's for the whole US! Where is the other 99.9% of the $6tr coming from?
http://uk.businessinsider.com/tesla-supercharger-network-exp...
These claims always bother me. Besides the obvious pollution from the generation of electricity required to run the car (in places where clean energy isn't available), there are also the issues of energy required to manufacture the car, energy required to replace battery packs after several years, energy required to recycle the car at end of life, etc. Driving without dirtying the air is really hard to achieve if you think about the whole chain of events that goes into that. Far better to live and work within easy travelling distance if you want to have less of a negative impact on the environment.
Your average make-tiny-explosions-in-a-chamber based vehicle can give you about 250,000 to 1 million km (150k-625k miles). Then it's just done. The parts are worn down. It's given its all.
Your average move-power-from-batteries-to-engines based vehcile can EASILY keep on going for 10 million km or more. Yes, even the battery pack can get there, though it would indeed be by far the first thing that will fail. It is far cheaper to replace that, than to replace an entire combustion engine.
Given that, you could draw the conclusion that the energy required to make the chair, the radio, the dashboard, etc – can be divided by at least 10, probably more.
But your average person does not ride more than ~250000 KM in a decade, and for sheer matters of safety engineering, style, conveniences like supporting modern electronics – most people consider a 10 year old car pretty old, and a 20 year old one ancient, and want to replace it simply because it is old. Which, for combustion cars, is not a big deal: It's pretty worn down by then.
But for EVs? That's a real problem. A 20 year old EV with 250k on the odometer is a damn shame. Nobody wants it anymore but all the parts still work.
Solve this problem and EVs are _INCREDIBLY_ better for the environment.
I guess self-driving cars helps; you can share a car and just order it to drive to your front door. But to make that a success, you need to do something about the 9-to-5 culture; people need to go to work, say, anywhere between 7am to 1pm, work 6 to 8 hours, and return home, and any job that needs full staffing the entire time people are at the office needs 2 shifts. That's a huge social upheaval (but it also gets rid of traffic jams, creates jobs, and probably boosts the economy because it is easier to do stuff because things are still open).
At which point we're in 'change the world, man!' hippie territory.
But one can dream, I guess.
In some countries, buses probably already follow this pattern, but in richer countries improving emissions standards obsolete the old ones.